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Source: The Unexpected 39

its steelworks were rapidly becoming obsolete and would need bil-
lions of dollars of investment to be modernized. It also knew that it
could not obtain the necessary sums. A new, smaller “mini-mill” was
the solution.
Almost by accident, such a “mini-mill” was acquired. It soon
began to grow rapidly and to generate cash and profits. Some of the
younger men within the steel company therefore proposed that the
available investment funds be used to acquire additional “mini-
mills” and to build new ones. Within a few years, the “mini-mills”
would then give the steel company several million tons of steel
capacity based on modern technology, low labor costs, and pin-
pointed markets. Top management indignantly vetoed the proposal;
indeed, all the men who had been connected with it found them-
selves “ex-employees” within a few years. “The integrated steel-
making process is the only right one,” top management argued.
“Everything else is cheating—a fad, unhealthy, and unlikely to
endure.” Needless to say, ten years later the only parts of the steel
industry in America that were still healthy, growing, and reasonably
prosperous were “mini-mills.”
To a steelmaker who has spent his entire life working to perfect
the integrated steelmaking process, who is at home in the big steel
mill, and who may himself be the son of a steelworker (as a great
many American steel company executives have been), anything but
“big steel” is strange and alien, indeed a threat. It takes an effort to
perceive in the “enemy” one’s own best opportunity.
Top management people in most organizations, whether small or
large, public-service institution or business, have typically grown up
in one function or one area. To them, this is the area in which they
feel comfortable. When I sat down with the chairman of R. H. Macy,
for instance, there was only one member of top management, the per-
sonnel vice-president, who had not started as a fashion buyer and
made his career in the fashion end of the business. Appliances, to
these men, were something that other people dealt with.
The unexpected success can be galling. Consider the company that
has worked diligently on modifying and perfecting an old product, a
product that has been the “flagship” of the company for years, the prod-
uct that represents “quality.” At the same time, most reluctantly, the
company puts through what everyone in the firm knows is a perfectly
meaningless modification of an old, obsolete, and “low-quality” prod-
uct. It is done only because one of the company’s leading salesmen